Sinking boats amidst a rising tide

Income shareIn 2005, the richest 300,000 Americans had almost as much income as the bottom 150 million.

Since 1980, the income pie (the total amount of income) has grown 74%, with population increasing only by a third during the same period.

In 2005, the bottom 90% of tax payers had about 1/2 (51.5%) of the income pie, down from 2/3 in 1980 (65.3%). The income share of this "vast majority" of tax payers has not been this low since 1928, when it was 51.7%.

From 1980 to 2005, the income share for the top 10% of tax payers grew from 1/3 (34.6%) to 1/2 (48.5%). For the bottom half of that top 10%, their income slice was unchanged (11.5% to 11.4%) but the top half - the 95th to 99th percentiles - grew from 13.2 to 15.3

The income share for the top 1% of tax payers increased from 10% to 21.8%.

To give some idea of the disparity within this percentile: The threshold to make it into the top 1% of taxpayers in 2005 was $348,400. At the very top, several persons earned a billion dollars. It would take 3,000 years to get from the threshold to the top.

For the top tenth of that 1%, the income share increased from 3.4% to 10.9%. For the top hundredth, 1.3% to 5.1%.

Since 1980, the economy has effectively increased by 2/3 yet income for the bottom 90% dropped from $29,495 to $29,143. But if you go back to 1973 the picture is even worse: that 90% earned $33,001 in '73. Despite 3 decades of growth the vast majority of Americans are earning less.

For the bottom half of income earners, income dropped from $15,464 (1980) to $14,149 (2004).

From 1975 to 2005 average annual income:

For the bottom 90% of taxpayers (270 million people in '05) - income decreased from $29,968 to $29,143; a 3% decrease.

For the top 1% (3 million people in '05) - income increased from $359,501 to $1,111,560; a 209% increase.

For the top 0.01% (30,000 people in '05) - income increased from $3,430,164 to $25,726,965; a 650% increase.

Under the Bush tax cuts, the 400 taxpayers with the highest incomes - a minimum of $87 million in 2000, the last year for which the government will release such data - now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000.

and "... because of the Bush tax cuts, those earning more than $10 million a year pay a smaller share of their money in income, Social Security, and Medicare taxes than those making between $100,000 to $200,000."

Johnston also points out that these 400 richest taxpayers received a larger effective tax cut under Clinton (8%) than Bush (5%).